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Written by Matthew Cerminaro on January 17, 2021
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Betterment vs Stash 2021: Best Investing Platform?

Everybody wants to get their finances straight. We hear it all of the time... "Are you investing? What stocks do you own? Have you opened an IRA?"

But an important question that most forget to ask is "What broker do you use?"

Don't get me wrong, it can be a tough process and there isn't always a straightforward choice. But that is why we at Investing Simple are here to help. Today we are going to be doing a comprehensive review of Betterment vs Stash, two cutting edge investing platforms that are competing for your business.

We'll be comparing the merits of both platforms as well as who each platform makes the most sense for. By the end of the article, you'll have a clear picture of where both of these brokers truly shine and which one you'll be best served by.

Product Features Overall Price Buy Now
betterment review

Betterment Review 2021: Is This The Best Robo Advisor?

  • Pricing
  • Assets
  • Account Types
  • Automation Tools
  • Prebuilt Portfolios
  • ETF Expense Ratio
  • Tax Strategy
  • Cash Management
Invest With Betterment
Stash Review

Stash Review 2021: Best Investing App?

  • Pricing
  • Assets
  • Account Minimum
  • Tools & Features
  • Sign Up Incentive
Invest With Stash

Summary: Stash vs Betterment

  • Both Betterment and Stash appeal to new investors who are looking to get started with the financial markets
  • Betterment's platform and features are more geared toward the investor who is looking for a highly automated process
  • Betterment has a high-yield savings account and is a great option for the patient investor who is still looking to accumulate interest on uninvested cash
  • Stash has online banking, offering a full service of spending, saving and investing money all in one
  • Betterment is more specifically concerned with the investing aspect of personal finance, however they do offer a checking and savings account too
  • Both offer easy to use mobile apps that simplify the investment process and help to democratize personal finance
  • Both Betterment and Stash have $0 minimums
  • Stash charges a monthly fee ranging from $1 to $9 per month
  • Betterment charges an annual asset management fee of 0.25% or 0.40%
  • Stash offers individual stocks while Betterment does not
  • Betterment only offers prebuilt portfolios of ETFs

What Is Betterment?

The first broker that we are going to take a look at is Betterment. Here's some information to get you familiar with the broker!

Betterment is trying to bridge the gap between professionals in the investment industry and newcomers to the stock market.

In the past, it was difficult to get your money professionally managed if you did not have a lot of it. If you went to a traditional financial advisor with a few hundred dollars to invest, most of them would turn you down.

Betterment has a $0 minimum policy, meaning they will work with anyone!

Additionally, they're coming in at a much more affordable price point than most financial advisors. As pioneers in the "robo-advising" industry, they are focused on lowering fees and providing greater accessibility to the everyday investor. features that were previously reserved for the 1% are now within reach of the 99% at a price point that is reasonable.

In this way, they are really changing the game for smaller investors who are now able to receive professional management of their assets.

Which robo-advisor is the best for you?

Answer a few quick questions and we'll recommend the best advisor for you, based on our objective analysis.

So-Fi Automated Investing

Read Full Review

Open Account

Management Fees $0

Account Minimum $0

Best For: low account balances, beginner investors

M1 Finance

Read Full Review

Open Account

Fees: $0

Account Minimum: $100/$500

Best For: beginner investors, pre-built portfolios

So-Fi Automated Investing

Read Full Review

Open Account

Management Fees $0

Account Minimum $0

Best For: low account balances, beginner investors

M1 Finance

Read Full Review

Open Account

Fees: $0

Account Minimum: $100/$500

Best For: beginner investors, pre-built portfolios

So-Fi Automated Investing

Read Full Review

Open Account

Management Fees $0

Account Minimum $0

Best For: low account balances, beginner investors

M1 Finance

Read Full Review

Open Account

Fees: $0

Account Minimum: $100/$500

Best For: beginner investors, pre-built portfolios

So-Fi Automated Investing

Read Full Review

Open Account

Management Fees $0

Account Minimum $0

Best For: low account balances, beginner investors

M1 Finance

Read Full Review

Open Account

Fees: $0

Account Minimum: $100/$500

Best For: beginner investors, pre-built portfolios

Personal Capital

Read Full Review

Open Account

Fees: 0.49% to 0.89%

Account Minimum: $100,000

Best For: Access to human advisors, larger account balances

Betterment

Read Full Review

Open Account

Fees: 0.25% to 0.40%

Account Minimum: $0

Best For: Full investment automation, access to human advisors

Personal Capital

Read Full Review

Open Account

Fees: 0.49% to 0.89%

Account Minimum: $100,000

Best For: Access to human advisors, larger account balances

Betterment

Read Full Review

Open Account

Fees: 0.25% to 0.40%

Account Minimum: $0

Best For: Full investment automation, access to human advisors

Personal Capital

Read Full Review

Open Account

Fees: 0.49% to 0.89%

Account Minimum: $100,000

Best For: Access to human advisors, larger account balances

Betterment

Read Full Review

Open Account

Fees: 0.25% to 0.40%

Account Minimum: $0

Best For: Full investment automation, access to human advisors

Betterment Features

Portfolio Automation

If we had to pick one feature of Betterment to showcase, it would be its portfolio automation abilities.

Not only will your portfolio automatically rebalance and reinvest for you, but it will also be tailored to your specific needs. Betterment will ask important questions such as your risk tolerance, investment goals, and time horizon, then create a diversified portfolio tailored to these preferences!

Once you have answered these questions, Betterment will construct a portfolio based on your specific needs and continue to monitor and update it over time.

If your portfolio strays from your target allocations, Betterment will rebalance for you on a daily basis. This essentially forces you to buy low and sell high automatically.

At the same time, any dividends you receive will automatically be reinvested across your entire portfolio and further rebalance your account.

SRI Portfolio

You can also choose preset portfolios to invest in on Betterment as well if that is more your style.

One example of these portfolios would be their Socially Responsible Investing Portfolio.

This portfolio that is actively managed by Betterment focuses on companies that act in a socially responsible way when conducting their business operations. By investing solely in companies that are doing good for the planet, you can rest easy knowing that your retirement dollars are having a positive impact. However, this is just one of the preset portfolios that Betterment offers.

Another example would be the Target Income Portfolio that Betterment offers targets bonds and high dividend stocks to facilitate higher dividend income. This may be a great option if you are retired, or are looking for a safe way to accrue passive income through dividends!

Investing in these portfolios is available at no additional cost to Betterment clients and allows you greater flexibility and freedom in how your assets are allocated.

Betterment Cash Reserve

Betterment's Cash Reserve initiative allows for increased savings and offers a competitive interest rate compared to other savings accounts.

If you are someone who is patient when investing and look to wait for the best opportunity to deploy your money, Betterment's Cash Reserve may be a great place to store your money when waiting it out.

You're also able to quickly move cash between your Cash Reserve and your investments and set up automation rules to further streamline the process. That means no more waiting 3-5 business day s for your funds to settle before investing. You can get in on the action right away.

RateAs Of
0.40%9/10/2020

Tax Loss Harvesting

Betterment does not only think about optimizing returns, but also how to minimize taxes!

They will automatically capture losses through tax-loss harvesting that can be used to offset capital gains from your other investment activity, such as earned dividends. By automatically scanning your portfolios for opportunities to sell positions at a loss while changing your allocations, Betterment is able to capture tax-deductible losses to reduce your tax bill at the end of the year.

This service on its own has the potential to more than cover the cost of Betterment and has previously only been an option for the ultra-wealthy. By taking advantage of tax-loss harvesting, it's possible to sizably reduce your taxes owed to the point where these savings more than cover the cost of Betterment.

Shows the list of accounts

Cash Back Checking

In addition to the investing-related offerings on Betterment, clients also have access to a free cash back checking account they can use to earn rewards from their spending. This checking account charges no fees of any kind, including ATM fees, foreign transaction fees, or overdraft, and is FDIC insured up to $250,000.

When spending on this card, you'll be automatically earning up to 5% cash back depending on where you use the card. Merchants partnered with Betterment include Walmart, Dunkin, Staples, and thousands of others.

Taking advantage of the Betterment checking account also allows you to further streamline your personal finance. By setting up Direct Deposit to this account, you can fully manage your finances all from within Betterment.

Betterment Fees

While Betterment does act to keep its costs low, it still has to make money in some way.

Betterment Digital (0.25%)

Betterment Digital is the most basic account that you can open with Betterment.

With a $0 account minimum, this account appeals to new investors who are looking to get their feet wet in the markets and begin investing for the future.

Included in this type of account are Betterment's portfolio automation features, its tax-management initiative, investment advice, and customer support.

The fee for Betterment's Digital account is 0.25% that is charged annually.

Betterment Premium (0.40%)

Betterment Premium is a step up from Betterment Digital and can be opened with a $100,000 account minimum.

For an annual fee of 0.40% you have unlimited access to a team of financial professionals who can help you manage your money both within and outside of Betterment.

At this tier, you are essentially reaping the majority of the benefits of working with your own financial advisor at less than half the cost. Most financial advisors start off at 1% for their services.

Betterment Pros

  • Betterment makes the investment process extremely hands-off and automated
  • Questionnaire assesses important questions such as risk tolerance and time horizon
  • Ability to segment account based on individual goals and objectives
  • Beginner-friendly and easy to use
  • Mobile app is easy to understand and simplifies the investment process
  • Customer support is well-regarded and an extensive FAQ page helps to answer all important questions
  • Betterment's hand-selected portfolios let you match returns similar to professionals in the investment industry
  • Cash Reserve lets you save and gain interest to optimize return potential on uninvested cash
  • Automation features allow Betterment to serve as a one-stop-shop for your personal finances
  • Work with Certified Financial Planners on the Premium tier

Betterment Cons

What Is Stash?

Stash Logo

Stash was built on the idea that online banking makes life easier.

By offering affordable investing, banking, saving, and personal guidance plans, Stash is making an attempt to digitize the personal savings and investing industry for its users.

The company is largely focused on providing a one-stop-shop for finances similar to Betterment. However, there are a number of important differences in how these two platforms are pursuing this objective.

How Does Stash Work?

Instead of offering a fully hands-off approach to investing like Betterment, Stash is much more of an active platform. Within the app, you are able to buy and sell shares of individual stocks and ETFs. You will be on your own to select those stocks and ETFs though. This is because unlike Betterment, Stash does not offer a fully-automated portfolio for you to invest in.

When you first create an account, Stash will ask you a few questions about your goals and risk tolerance to try to point you in the right direction. However, this questionnaire will not be nearly as comprehensive as what is offered on Betterment. You'll receive some suggestions and advice, but you will still be on your own to select your individual investments.

Depending on which plan you are on, the level of advice may be more or less comprehensive in nature.

Stash Features

$0 Commissions

One of Stash's most important features is its no commission structure.

You can execute buy and sell offers on the hundreds of stocks and ETFs offered on Stash for no charge.

This will help keep your costs low and optimize return potential. Diversifying your portfolio on Stash is easy without having to worry about the costs of trading commissions!

Betterment also does not charge commissions. However, you're not able to select individual stocks and ETFs to purchase on Betterment so all of the trading is done automatically.

Online Banking + Stock-Back Card

Subscribers of Stash's services will be offered online banking accounts.

These accounts have highly regarded features such as a flexible money management plan and getting paid up to two days early!

Included in Stash's online banking plan is their Stock-Back debit card that you can use to earn stock in the places you shop at. So if you spend $20 at Walmart, you could earn Walmart stock when you pay with your Stock-Back card.

For merchants that Stash is not partnered with, you'll be able to choose what stock or ETF they default to for your Stock-Back.

Retirement Accounts

On the Stash platform, you'll have access to invest in retirement accounts like IRAs and Roth IRAs. When you choose to take advantage of these accounts, you'll be able to capitalize on significant tax benefits including tax deferral and potentially taking your investment gains tax-free!

However, these accounts do come with specific rules that you'll need to follow in order to qualify for the tax benefits, so make sure to do your homework beforehand.

You will also be able to access these retirement accounts on Betterment.

Stash Learn

If you are looking to not only invest with your broker, but to learn as well, Stash delivers.

Stash Learn can be found on the company's website and is a great resource for free investing and market education. From news articles written by market journalists to investment portfolio recommendations written by expert financial advisors, you can learn a lot through Stash Learn!

Many brokers focus more of their attention on getting the sale and less on education, so it's refreshing to see Stash make an effort here.

Automatic Savings

If you are looking to both invest AND save, Stash's Automatic Savings will be right up your alley.

You can set a fixed amount to save each week and Stash will automatically move money from your checking account to a savings account where it can begin earning interest. The compound effect of this is essential for future savings and a great option if you are looking to save money!

When compared to Betterment's automation options, Stash clearly doesn't offer as much. However, if you're in search of some simple automatic deposits you'll be able to find that with Stash.

Stash Fees

While Stash does offer $0 commissions and keeps costs lows to its users, it still operates on a subscription-based structure.

You will pay anywhere from $1 to $9 per month based on the plan you choose and the features you are looking for.

Stash Price

Stash Pros

  • $0 commissions on stock and ETF trading
  • More flexibility in choosing your individual investments
  • Online banking is highly digitized and made easy
  • Up to two days early pay when you set up direct deposit
  • Educational resources are abundant and can be found for free on Stash's website
  • Stash has a very easy to use mobile app which simplifies the investment/savings/banking process

Stash Cons

  • Monthly fees may be high for some with smaller accounts
  • No access to personalized advice from Certified Financial Planners
  • Requires investors to take a more hands-on approach

Final Verdict: Betterment vs Stash

Betterment is geared towards the more hands-off, passive investor. You are not able to pick individual stocks to invest in. Instead, you will be getting a professionally managed portfolio for an annual asset management fee ranging from 0.25% to 0.40% annually.

On the other hand, Stash is more for a hands-on investor who might want to pick and choose some stocks to invest in. The fee structure is $1 to $9 per month, making this potentially higher in fees for smaller account sizes.

When deciding between the two, it's largely going to come down to your investing style and the features that you're looking for. In general, Betterment will offer a wider array of services and require less hands-on attention from you. However, there may be some investors that prefer the simplified platform that Stash offers.

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Betterment vs Stash: 2020
Article written by Matthew Cerminaro
Matt is currently attending Union College pursuing a Bachelor of Arts in Economics. He participates in the student investment fund and is a member of the Union College football team. Matt runs his own personal finance Instagram page and market-related blog where he writes about economics and general wealth accumulation tips.

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